Government reveals promised “urgent” leasehold reform proposals

The government has revealed that its promised leasehold reform proposals will soon ban new-build houses being sold using this type of tenure. It says it will also move to restrict ground rent increases to very low or even zero, all pending an eight-week consultation. The announcement follows February’s Housing White Paper in which the government said “urgent reform” was needed to leaseholds in the UK. There are 1.2 million leasehold houses of which 100,000 feature unfair terms but these will be unaffected by the new legislation. Only future leases will be protected from unfair terms. In the past houses have been sold by developers such as Taylor Wimpey as leasehold, often at reduced cost compared to their freehold counterparts. But they come with greater costs in the long run, the government says. Examples given to support the new proposals include a family home on which the ground rent will reach £10,000 a year by 2060, making it virtually unsaleable and a homeowner charged £1,500 to make a minor alteration to their home. The government is also concerned by the practice of developers selling on freeholds and/or ground rents of leasehold houses, leaving owners “in the dark and facing increasing onerous payments,”…

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